Abu Dhabi may come to spill-hit BP's rescue

BloombergJul 14, 2010, 01.28am IST

DUBAI: Abu Dhabi's crown prince, a member of the board of one of the world's largest sovereign wealth funds, said the emirate is considering an investment in BP Plc after the company lost half its value following the worst oil spill in US history. "We are still thinking about it," Sheikh Mohammed bin Zayed Al Nahyan said in an interview in Abu Dhabi on Tuesday, when asked about potentially buying a stake in the London-based oil producer. "We are looking across the board. We have been partners with BP for years."

BP CEO Tony Hayward said on July 7 that he had a "very good" meeting with the crown prince as analysts said the oil producer may be looking for support from Middle East investors. Hayward pledged last month to set aside $20 billion for spill victims and cleanup. "Lots of people would like to get into BP now," said Christine Tiscareno, an analyst at Standard & Poor's in London. "Hayward has assured people that things are under control. If Abu Dhabi increases its stake, it is saying that there is a future for BP, it's not a dying company."

Share Performance

BP shares have gained 27% since the start of July and rose for a second day in London trading, gaining as much as 5.2% to trade at 417.30 pence as of 1:44 pm local time. The stock is down 37% since the April 20 accident in the Gulf that killed 11 workers and started the spill.

"We would welcome any investor buying or increasing their stake," said Robert Wine, a spokesman for BP in London. He declined to comment on Abu Dhabi in particular.

BP installed a new cap on the well that may be able to stop the flow of oil until relief wells can plug it permanently. It will start testing pressure in the well today, Doug Suttles, chief operating officer for exploration and production, told reporters on Monday. The crown prince is chairman of Mubadala Development Co, an investment arm of the Abu Dhabi government.

BP produces oil in the sheikhdom, where it is a partner with state-run Abu Dhabi National Oil Co, known as Adnoc, in a venture that dates back to the first oil concession granted in the 1930s in what is now the UAE.